According to the Empire Center report, New York experienced the nation’s largest loss of residents to other states—a net domestic migration outflow of over 1.5 million, or 8 percent of its population at the start of the decade.This follows a 1.7 million loss in the 1990’s. Taxpayers are leaving New York. High income taxpayers, in particular, are leaving.

The States that benefited from New York’s migration losses were Florida, New Jersey, Connecticut, North Carolina and Pennsylvania.Florida gained over 314,000 taxpayers from NY representing a staggering $9.1 billion of tax base. It has no state income tax. New Jersey gained 167,067 taxpayers and $5.7 billion of tax base. North Carolina gained 82,169 and $1.85 billion. Connecticut gained 51,455 and $2.77 billion. Pennsylvania gained 88,961 and $1.52 billion. New York has lost over $29 billion in tax base in the 2000’s alone.

Tax policy for states must be established with a view of what other options people have. People have choices within the US as well as other countries regarding where to live and be taxed. People are voting with their feet in NY. They prefer lower tax rates. The chart below on New York Net Domestic Migration by Year is from the study. New York has lost almost 1 million people in the 2000’s to other states.

New York State is in a negative cycle downward. At some point it might look to draw more people in by lowering its rates. Unfortunately until it does so, people will keep leaving. The entire listing of taxpayer migration by state to (from) New York is listed below courtesy of the Empire Center for New York State Policy.

The Bureau of Labor Statistics BLS released the September 2009 List of State Unemployment last week. 23 States saw unemployment rise from August, 19 saw decreases and 8 were unchanged. The US Unemployment rate for September 2009 was 9.8%.

New York was the Worst State for Jobs in September with a loss of 81,700 jobs.

Texas (-44,700), California (-39,300), Wisconsin(-21,700), and Michigan (-21,500) rounded out the 5 Worst States
for Jobs in September. Michigan continues as the Worst Statefor Employment with a staggering 15.3%
unemployment rate. Nevada, Alabama, Oregon and West Virginia are also in the 5 Worst States for Employment.California is not far behindas a worst state for jobs. See our post on California Jobs Shrinking

The Best State for Jobs in September 2009 was Indiana which gained 4,400 jobs. The Best State for Employment
was North Dakota with a 4.2% unemployment rate. Only 3 other states qualified as Best States for Jobs in September.
They were New Mexico (+3,700), Nevada (+2,700), and Utah (+2,500). Go to our lastestSeptember list of job openings by state for more on where the job openingsAll states and the District of Columbia recorded statistically significant increases in their jobless rates on a year on year basis.Michigan had the largest increase +6.4%. Nevada, 6.0% and Alabama at 5.3% also had the highest increases in the U.S.North Dakota had the smallest increase at +.9%. The Year on Year change of Unemployment for all 50 States is below.

The California Employment Development Department just released September numbers and California jobs declined by 39,300 during the month. Unemployment was 12.2% for September, a slight improvement due to an upward revision of August to 12.3%

September should show more State Employment decreases as the September US Unemployment rate increased to 9.8% from 9.7%.

The LA Times ran a story California Job Losses Keep Climbing on Friday as well about the outlook for California Jobs. Los Angeles County’s unemployment rate soared to 12.7% in September, upfrom 12.2% in August. Industries including leisure and hospitality,manufacturing and construction shed jobs over the month. The Bay Area saw its unemployment rate decrease from August. The jobless rates in Napa County, at 8.7%,and the San Francisco-San Mateo-Redwood City Metro Division, at 9.2%,are among the lowest in the state. All five metro divisions in the Bay Area improved. California Jobs do not look like they will be improving significantly soon. See also California Job Openings September 2009

We ran our September 2009 Best and Worst States for Job openings. Job Openings dropped an alarming 6.2% on September 30 as compared to July 31. This is particularly discouraging as we had seen our only increase in job openings this year in July. This reversal ratifies the year long downward trend. We develop our analysis from data listed by the nation’s largest job posting service CareerBuilder.com. It is a good proxy for job openings nationwide.

Job Openings nationwide shrank in September to 217,040 from 231,370 in July, a drop of 14,330 job openings.

48 States saw jobs shrink. Alaska, NorthDakota, South Dakota and Montana saw the biggest percentage job opening losses. KentuckyJobs, with an increase of only 180 job openings. and Utah Jobs, up 30, were the TopStates for Jobs and the only 2 states in the nation that showed improvement since July 31.

CaliforniaJobs shrank the most numerically with an 1197 loss at September 30. Texas Jobs, Florida Jobs and Pennsylvania Jobs showed large losses in numbers in September. ( I will post analysis of Job Opening Losses during the Obama Administration after unemployment numbers are released for September)

The list of Best and Worst States for Jobs as of September 2009 follows:

California has always had a wild streak. This week California’s new tax proposal reinforced that image.

The Commission on the New 21st Century Economy issued its report this week on a radical new tax structure for California. Like all political taxing plans it has its good and bad aspects. It did, however, increase discussion about what California needs to do to become an attractive state for business and individuals.

Here are the recommendations of the Commission: (My comments are in red)

Reduce Personal Income Tax (PIT) for every taxpayer – Reduce the number of tax brackets from six to two. The new tax rate would be 2.75 percent for taxable income up to $56,000 for joint filers ($28,000 for single) and 6.5 percent for taxable income above that amount. These changes would retain the PIT’s progressive nature but reduce income tax rates for all taxpayers. The proposal would reduce the amount of income tax paid by 29 percent. (This is Good)

Eliminate the corporation tax and minimum tax – Eliminate the corporate tax, which is currently at 8.84 percent. The $800 minimum franchise tax should also be eliminated. (This is Good)

Eliminate the state general purpose sales tax – Eliminate the current 5 percent state sales tax, with the exception of the sales tax on gas and diesel fuels which would continue to be dedicated to transportation. Elimination of the sales tax would phase in over five years. (This is Good)

Establish a business net receipts tax (BNRT) – Establish a new tax, not to exceed 4 percent, applied to the net receipts of businesses. Small businesses with less than $500,000 in gross annual receipts would be exempt from this tax. This tax would have a much broader base than the sales tax (since it would apply not only to goods but also to services and to sales into the state from businesses located outside the state) and, unlike the sales tax, be deductible against federal taxes. (This is very very Bad)

Create an independent tax dispute forum – This forum would provide taxpayers with a forum for resolving disputes with the state. (This is Good)

This proposal does not appear to fix these problems. It just shuffles the burdens around a little by being according to the Commission “revenue neutral.”

“This is the most significant tax policy proposal in three decades,” said Assemblyman Chuck Devore (R-Irvine). “But the chances of this getting approved, as is, are zero percent.” The LA Times reported the proposal is unlikely to pass. See LA Times story Tax commission report falls flat, but it’s a start

With the U.S. in the midst of a severe job shrinkage, it is only a matter of time that some states and legislatures start getting serious about creating an environment conducive to job creation. Cutting tax burdens and tax rates will be a strong first step in getting the job engine going. California’s proposal unfortunately is not a step in the right direction. It will remain a Worst State for Taxes even if it passes the Commission’s recommendations.